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983 Mission De Oro

FREE Bankruptcy consultation in Redding...
call (530)244-0300

Beware of the "Debt Negotiator"

With many experts suggesting that our economy is on the decline, and with more and more people finding themselves up to their eyeballs in credit card debt, some of you may be wondering if a Credit Counseling Agency could help. Although some of these agencies can be helpful in certain situations, I would suggest consulting with an attorney prior to signing any agreements. Here's why:

Some credit counseling agencies are actually what I refer to as "Debt Negotiators". What they do is easier to explain using an example: Jenny owes three credit cards a total of $9,000 ($3,000 each). The "debt negotiator" instructs Jenny to send them a payment of say, $200 monthly instead of paying the creditors that she owes. So on month 1, Jenny sends the debt negotiator $200. They keep the money in an account and none of the creditors get anything. On month 2, the same thing happens. Same thing with months 3, 4, and 5.

By now, the "debt negotiator" has $1,000 of Jenny's money. Debt negotiator then calls credit card #1 and offers to "settle" Jenny's bill for $750 (They keep some of Jenny's money for themselves). Meanwhile, all during months 1-5, Jenny has been getting phone calls from Creditors 1, 2 and 3.not to mention a terrible credit rating! To top it all off, a listing of "settled" on a credit report is just a bad as "discharged in bankruptcy"! And don't forget, in this scenario, six months into it, creditors 2 and 3 have still received nothing! Failure to make payments for that length of time can easily lead to lawsuits, judgments, and eventually wage garnishments and bank levies. All while Jenny was faithfully making her payments to Mr. Debt Negotiator.

As you can see, the "Debt Negotiator" didn't really do Jenny any favors. In fact, she now finds herself in a much worse situation than she was in previously. What's the moral of the story? If you are in financial trouble, don't wait until you are in Jenny's situation - call my office for a free consultation, and I can advise you on the best course of action for your particular situation.

Courtesy of Amy Spencer-Martyn
Spencer-Martyn Law Offices
Redding, CA 96002
(530) 244-0300

This information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Bankruptcy Attorney, Redding, CA

983 Mission De Oro

FREE Bankruptcy consultation in Redding...
call (530)244-0300

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